Corporate trends / Performance record
Unfair Dismissal Decision Concerning “Number of Regular Employees (Aggregation of Sole Proprietorships)” (Unfair Dismissal 470)
- Date2026/05/22 04:04
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[Case Information]
This case is a decision that was procedurally dismissed at the stage of determining the “number of regular employees (aggregation of sole proprietorships).”
Decision body: Gyeonggi Regional Labor Relations Commission 2025 Unfair Dismissal 10270 ○ ○ ○ Application for Remedy for Unfair Dismissal
2026.03.20 · Case outcome: Dismissed
Summary of key issue: The employee argued that it could not be ruled out that additional employees were working for the company, that the number of regular employees was stated as six in job postings and on recruitment websites, and that the company and the sole proprietorship operated by the representative director were in closely related lines of business and operated at adjacent locations, so that they should in substance be regarded as a single business unit with at least five regular employees. However, (i) although the business registration certificate for the sole proprietorship shows the same address as the company…
1. Legal Implications
Ⅰ. Case Overview
This unfair dismissal case was brought as an application for remedy before the Gyeonggi Regional Labor Relations Commission, and the central issue was how the Commission would calculate the company’s number of regular employees. The employee applied for a remedy for unfair dismissal on the basis that the company and a nearby sole proprietorship operated by the representative director should in substance be regarded as a single business unit with at least five regular employees. The employer, on the other hand, contested the applicability of the unfair dismissal remedy procedure under the Labor Standards Act itself, asserting that the number of regular employees was fewer than five.
In this case, the Labor Relations Commission, after comprehensively reviewing the status of employment insurance and health insurance enrollment, business registrations, and the actual number of working staff, found that the number of regular employees was fewer than five. Accordingly, it did not proceed to examine the legitimacy of the dismissal and dismissed the application.
Ⅱ. Issues in Dispute
The issue in this case is whether “the sole proprietorship operated by the representative director can be included so that it is treated as a single business unit with the company, and, as a result, whether the number of regular employees reaches five or more so as to fall within the scope of an application for remedy for unfair dismissal.”
In other words, the dispute concerned whether the workplace fell within the category of “workplaces ordinarily employing five or more employees” as defined in Article 11 of the Labor Standards Act, and whether the precondition for filing an unfair dismissal remedy application with the Labor Relations Commission was satisfied.
Ⅲ. Summary of the Labor Relations Commission’s Decision
The panel in this case held that: (i) although the business registration certificate for the sole proprietorship operated by the representative director shows the same address as the company, the entire history of insured persons under employment insurance for that business shows only one person in the past, prior to the employee’s hiring; (ii) as of the date the employment relationship ended, there appear to have been four employees enrolled as insured persons under the company’s employment insurance and health insurance; (iii) the employee himself acknowledged that, during his period of service, there were no other employees besides the three department heads including himself; and (iv) no other objective materials were submitted to show that the number of regular employees was five or more.
On this basis, the Commission found it difficult to regard the company and the sole proprietorship as a single business unit in substance, and further held that, even if they were viewed together, there was insufficient evidence to recognize that the number of regular employees reached “five or more on an ordinary basis.”
The Commission therefore found that the dismissal in this case did not fall within the scope of application of the unfair dismissal remedy system under the Labor Standards Act (workplaces with five or more regular employees). It dismissed the employee’s application for remedy without separately examining the legitimacy of the dismissal.
Ⅳ. Practical Points (From the Employee’s Perspective)
For an employee to apply to the Labor Relations Commission for a remedy for unfair dismissal, it is first necessary to be able to prove, with objective materials, that the company is a workplace “ordinarily employing five or more employees” under the Labor Standards Act. Statements of headcount in job postings or on internet sites may be insufficient; accordingly, employees should collect and submit as broadly as possible materials such as records of actual working staff, employment insurance and health insurance enrollment details, and payroll ledgers.
In addition, where a representative director operates multiple businesses, whether they can be regarded as a single business unit is judged strictly under Supreme Court precedents, based on factors such as commonality of human and physical facilities and the unity of accounting and personnel management. Employees should note that mere similarity of business type and physical proximity is not sufficient.
Ⅴ. Practical Points (From the Employer/Company’s Perspective)
From the employer’s perspective, even if the number of regular employees is fewer than five, it is advisable, in order to prevent future disputes, to establish basic personnel and labor management systems, including the execution of written employment contracts, notification of reasons for dismissal, and maintenance of personnel records. In particular, where multiple corporations or sole proprietorships are operated together, if personnel, accounting, and facilities are commingled, they may be evaluated as a single business unit, resulting in full application of the Labor Standards Act and the unfair dismissal remedy system. Employers should therefore carefully review the actual mode of operation.
Furthermore, under Article 7-2 of the Enforcement Decree of the Labor Standards Act, the number of regular employees is calculated by averaging the total number of employees used over a certain period (the cumulative number of employee-days). Employers should accurately manage the status of all personnel, including daily and part-time workers, and be prepared to objectively substantiate this when requested by the Labor Relations Commission or the courts.
2. Matters Decided
A. Case Overview and Procedural History
The employee argued that it could not be ruled out that additional employees were working for the company, that the number of regular employees was stated as six in job postings and on recruitment websites, and that the company and the sole proprietorship operated by the representative director were in closely related lines of business and operated at adjacent locations, so that they should in substance be regarded as a single business unit with at least five regular employees. However, (i) the business registration certificate for the sole proprietorship shows the same address as the company, and the entire history of insured persons under employment insurance for that business shows only one person in the past, prior to the employee’s hiring; (ii) as of the date the employment relationship ended, there appear to have been four employees enrolled as insured persons under the company’s employment insurance and health insurance; (iii) the employee also acknowledged that, during his period of service, he worked together with three department heads, and there appear to have been no other employees; and (iv) the employee failed to submit any other objective evidentiary materials showing that the company’s number of regular employees was five or more. In light of these circumstances, the company’s number of regular employees is recognized as fewer than five. Accordingly, there is no need to examine the remaining issue of whether the dismissal was justified.
3. Summary of the Decision
A. Summary of the Labor Relations Commission’s Reasoning
The employee argued that it could not be ruled out that additional employees were working for the company, that the number of regular employees was stated as six in job postings and on recruitment websites, and that the company and the sole proprietorship operated by the representative director were in closely related lines of business and operated at adjacent locations, so that they should in substance be regarded as a single business unit with at least five regular employees. However, (i) the business registration certificate for the sole proprietorship shows the same address as the company, and the entire history of insured persons under employment insurance for that business shows only one person in the past, prior to the employee’s hiring; (ii) as of the date the employment relationship ended, there appear to have been four employees enrolled as insured persons under the company’s employment insurance and health insurance; (iii) the employee also acknowledged that, during his period of service, he worked together with three department heads, and there appear to have been no other employees; and (iv) the employee failed to submit any other objective evidentiary materials showing that the company’s number of regular employees was five or more. In light of these circumstances, the company’s number of regular employees is recognized as fewer than five. Accordingly, there is no need to examine the remaining issue of whether the dismissal was justified. /
[See More Related Decisions]
- “Unfair Dismissal Decision Concerning ‘Failure to Satisfy Requirements for Redundancy Dismissal (Workout Company)’”
- “Unfair Dismissal Decision Concerning ‘Expression of Intent to Resign (Resignation Remark in Telephone Call)’”
- “Unfair Dismissal Decision Concerning ‘Non-Formation of Hiring Commitment (Absence of Offer Letter)’” – Date of decision: – Case number: First-instance decision upheld
[Tags]
Unfair dismissal, number of regular employees (aggregation of sole proprietorships), others, Labor Law Firm Law&, large labor law firm, Samseong-dong labor law firm, Samseong Station labor law firm, Gangnam labor law firm
※ This article is part of Labor Law Firm Law&’s “Unfair Dismissal Decisions” series.
※ The previous article, “Unfair Dismissal Decision Concerning ‘Employee Status (Direction and Supervision of a Cinematographer)’,” can be viewed in a new window.
※ The list of decisions related to the number of regular employees (aggregation of sole proprietorships) can be viewed together at “List of Decisions Related to the Number of Regular Employees (Aggregation of Sole Proprietorships).”
※ Korean version of this case: Korean article
This case is a decision that was procedurally dismissed at the stage of determining the “number of regular employees (aggregation of sole proprietorships).”
Decision body: Gyeonggi Regional Labor Relations Commission 2025 Unfair Dismissal 10270 ○ ○ ○ Application for Remedy for Unfair Dismissal
2026.03.20 · Case outcome: Dismissed
Summary of key issue: The employee argued that it could not be ruled out that additional employees were working for the company, that the number of regular employees was stated as six in job postings and on recruitment websites, and that the company and the sole proprietorship operated by the representative director were in closely related lines of business and operated at adjacent locations, so that they should in substance be regarded as a single business unit with at least five regular employees. However, (i) although the business registration certificate for the sole proprietorship shows the same address as the company…
1. Legal Implications
Ⅰ. Case Overview
This unfair dismissal case was brought as an application for remedy before the Gyeonggi Regional Labor Relations Commission, and the central issue was how the Commission would calculate the company’s number of regular employees. The employee applied for a remedy for unfair dismissal on the basis that the company and a nearby sole proprietorship operated by the representative director should in substance be regarded as a single business unit with at least five regular employees. The employer, on the other hand, contested the applicability of the unfair dismissal remedy procedure under the Labor Standards Act itself, asserting that the number of regular employees was fewer than five.
In this case, the Labor Relations Commission, after comprehensively reviewing the status of employment insurance and health insurance enrollment, business registrations, and the actual number of working staff, found that the number of regular employees was fewer than five. Accordingly, it did not proceed to examine the legitimacy of the dismissal and dismissed the application.
Ⅱ. Issues in Dispute
The issue in this case is whether “the sole proprietorship operated by the representative director can be included so that it is treated as a single business unit with the company, and, as a result, whether the number of regular employees reaches five or more so as to fall within the scope of an application for remedy for unfair dismissal.”
In other words, the dispute concerned whether the workplace fell within the category of “workplaces ordinarily employing five or more employees” as defined in Article 11 of the Labor Standards Act, and whether the precondition for filing an unfair dismissal remedy application with the Labor Relations Commission was satisfied.
Ⅲ. Summary of the Labor Relations Commission’s Decision
The panel in this case held that: (i) although the business registration certificate for the sole proprietorship operated by the representative director shows the same address as the company, the entire history of insured persons under employment insurance for that business shows only one person in the past, prior to the employee’s hiring; (ii) as of the date the employment relationship ended, there appear to have been four employees enrolled as insured persons under the company’s employment insurance and health insurance; (iii) the employee himself acknowledged that, during his period of service, there were no other employees besides the three department heads including himself; and (iv) no other objective materials were submitted to show that the number of regular employees was five or more.
On this basis, the Commission found it difficult to regard the company and the sole proprietorship as a single business unit in substance, and further held that, even if they were viewed together, there was insufficient evidence to recognize that the number of regular employees reached “five or more on an ordinary basis.”
The Commission therefore found that the dismissal in this case did not fall within the scope of application of the unfair dismissal remedy system under the Labor Standards Act (workplaces with five or more regular employees). It dismissed the employee’s application for remedy without separately examining the legitimacy of the dismissal.
Ⅳ. Practical Points (From the Employee’s Perspective)
For an employee to apply to the Labor Relations Commission for a remedy for unfair dismissal, it is first necessary to be able to prove, with objective materials, that the company is a workplace “ordinarily employing five or more employees” under the Labor Standards Act. Statements of headcount in job postings or on internet sites may be insufficient; accordingly, employees should collect and submit as broadly as possible materials such as records of actual working staff, employment insurance and health insurance enrollment details, and payroll ledgers.
In addition, where a representative director operates multiple businesses, whether they can be regarded as a single business unit is judged strictly under Supreme Court precedents, based on factors such as commonality of human and physical facilities and the unity of accounting and personnel management. Employees should note that mere similarity of business type and physical proximity is not sufficient.
Ⅴ. Practical Points (From the Employer/Company’s Perspective)
From the employer’s perspective, even if the number of regular employees is fewer than five, it is advisable, in order to prevent future disputes, to establish basic personnel and labor management systems, including the execution of written employment contracts, notification of reasons for dismissal, and maintenance of personnel records. In particular, where multiple corporations or sole proprietorships are operated together, if personnel, accounting, and facilities are commingled, they may be evaluated as a single business unit, resulting in full application of the Labor Standards Act and the unfair dismissal remedy system. Employers should therefore carefully review the actual mode of operation.
Furthermore, under Article 7-2 of the Enforcement Decree of the Labor Standards Act, the number of regular employees is calculated by averaging the total number of employees used over a certain period (the cumulative number of employee-days). Employers should accurately manage the status of all personnel, including daily and part-time workers, and be prepared to objectively substantiate this when requested by the Labor Relations Commission or the courts.
2. Matters Decided
A. Case Overview and Procedural History
The employee argued that it could not be ruled out that additional employees were working for the company, that the number of regular employees was stated as six in job postings and on recruitment websites, and that the company and the sole proprietorship operated by the representative director were in closely related lines of business and operated at adjacent locations, so that they should in substance be regarded as a single business unit with at least five regular employees. However, (i) the business registration certificate for the sole proprietorship shows the same address as the company, and the entire history of insured persons under employment insurance for that business shows only one person in the past, prior to the employee’s hiring; (ii) as of the date the employment relationship ended, there appear to have been four employees enrolled as insured persons under the company’s employment insurance and health insurance; (iii) the employee also acknowledged that, during his period of service, he worked together with three department heads, and there appear to have been no other employees; and (iv) the employee failed to submit any other objective evidentiary materials showing that the company’s number of regular employees was five or more. In light of these circumstances, the company’s number of regular employees is recognized as fewer than five. Accordingly, there is no need to examine the remaining issue of whether the dismissal was justified.
3. Summary of the Decision
A. Summary of the Labor Relations Commission’s Reasoning
The employee argued that it could not be ruled out that additional employees were working for the company, that the number of regular employees was stated as six in job postings and on recruitment websites, and that the company and the sole proprietorship operated by the representative director were in closely related lines of business and operated at adjacent locations, so that they should in substance be regarded as a single business unit with at least five regular employees. However, (i) the business registration certificate for the sole proprietorship shows the same address as the company, and the entire history of insured persons under employment insurance for that business shows only one person in the past, prior to the employee’s hiring; (ii) as of the date the employment relationship ended, there appear to have been four employees enrolled as insured persons under the company’s employment insurance and health insurance; (iii) the employee also acknowledged that, during his period of service, he worked together with three department heads, and there appear to have been no other employees; and (iv) the employee failed to submit any other objective evidentiary materials showing that the company’s number of regular employees was five or more. In light of these circumstances, the company’s number of regular employees is recognized as fewer than five. Accordingly, there is no need to examine the remaining issue of whether the dismissal was justified. /
[See More Related Decisions]
- “Unfair Dismissal Decision Concerning ‘Failure to Satisfy Requirements for Redundancy Dismissal (Workout Company)’”
- “Unfair Dismissal Decision Concerning ‘Expression of Intent to Resign (Resignation Remark in Telephone Call)’”
- “Unfair Dismissal Decision Concerning ‘Non-Formation of Hiring Commitment (Absence of Offer Letter)’” – Date of decision: – Case number: First-instance decision upheld
[Tags]
Unfair dismissal, number of regular employees (aggregation of sole proprietorships), others, Labor Law Firm Law&, large labor law firm, Samseong-dong labor law firm, Samseong Station labor law firm, Gangnam labor law firm
※ This article is part of Labor Law Firm Law&’s “Unfair Dismissal Decisions” series.
※ The previous article, “Unfair Dismissal Decision Concerning ‘Employee Status (Direction and Supervision of a Cinematographer)’,” can be viewed in a new window.
※ The list of decisions related to the number of regular employees (aggregation of sole proprietorships) can be viewed together at “List of Decisions Related to the Number of Regular Employees (Aggregation of Sole Proprietorships).”
※ Korean version of this case: Korean article
